Post-election Lessons from MI and OH: Fuel Efficiency Matters

When it comes to understanding the outcomes in Michigan and Ohio, pundits have pointed to the auto rescue loans and clean energy playing decisive roles. Clean energy won big with voters, decisively choosing many candidates who campaigned on clean, renewable sources of energy, starting with President Obama. However, what is less discussed is the direct role played by the Obama Administration’s new carbon pollution and fuel efficiency standards that will achieve the equivalent of 54.5 mpg by 2025.

Not only do polls show that raising fuel-efficiency standards is highly popular with voters, including in Michigan and Ohio, but auto workers could also clearly see by 2012 that investments in fuel efficiency were helping to preserve and create jobs.

While Romney promised to overturn the Obama Administration’s latest round of carbon pollution and fuel efficiency standards and had even said that he would roll back existing standards that would have cars reaching an average of 35.5 miles per gallon by 2016, President Obama touted the standards in numerous speeches and in the second debate.

Clean Energy and Fuel Efficiency Highly Popular with MI and OH Voters

As noted above, clean energy won big, with voters decisively choosing many candidates who campaigned on clean, renewable sources of energy.  Romney’s opposition of the standards certainly fed into the narrative that he was the candidate of fossil fuels and not clean energy.

But voters rejected this "drill-centric" vision, despite the oil, gas, and coal companies spending more than $270 million in campaign ads in just the last two months.  A new survey of voters by Greenberg Quinlan Rosner Research in key battleground states confirms that these energy attacks failed to resonate with voters, including voters in Midwestern states where the energy attacks were most heavily focused. The survey, released on November 7th, found:

“President Obama and Democrats retain more credibility on energy than Republicans. Voters believe Obama will do a better job on energy than Romney by a 7 point margin, 51-44 percent. And they think Democrats will do a better job on this issue than Republicans by a 50 – 43 percent margin. These advantages are significant and represent larger advantages for Obama and Democrats than they receive on either the economy or taxes.”

Fuel efficiency standards themselves are highly popular withMichigan and Ohio voters. According to poll conducted last September for the NRDC Action Fund, "undecided" voters were more likely to vote for the Presidential candidate that supported higher fuel efficiency standards by a 2-1 margin in Michigan and a 3-1 margin in Ohio.  "Likely" voters in those states also were more likely to vote for the Presidential candidate that supported higher fuel efficiency standards by a 2-1 margin in both states.

Auto companies and their workers in Michigan and Ohio understood how a Romney Administration’s attempt to overturn the standards threatened to create chaos for their investment plans. These plans are based on long-term stability of the hard fought fuel-efficiency standard agreements.

Creating this stability and certainty- including California’s agreement to be part of the national program- was so important that in a speech to the Detroit Economic Forum, Chairman and CEO Dan Akerson praised the Obama administration's 54.5 mpg proposal as a “win for American manufacturers”. According to the Detroit News:

Akerson said the uncertainty about future requirements had been "one of the major risks coming into 2011." Under the deal, automakers won't face separate regulations from California and other states.

Fuel-Efficiency Standards a Powerful Boost to Auto Jobs

The standards also gave a huge boost to the auto industry by accelerating investments in the latest fuel-efficient technologies and vehicles, stimulating sales and jobs. By the time of the elections, auto workers in the Midwest could clearly see the positive role of fuel efficiency in preserving and creating jobs.

Fuel efficiency had two well-understood impacts on jobs.

First, major investments in fuel efficiency are directly creating jobs. There are already 150,000 jobs in 43 states and 500 facilities that are dependent on building fuel efficient components and vehicles. As clearly documented in NRDC’s recent study Driving Growth, Michigan and Ohio are especially benefiting, with hundreds of millions of dollars of investment flowing into Michigan and Ohio and thousands of workers being hired.

In Ohio, for example, there are numerous examples of fuel efficiency-related investments and jobs:

  • In Lordstown, GM has three shifts building the fuel efficient, compact Chevy Cruze which gets up to 40 mpg.
  • In Cleveland, Ford created a third shift to build the award winning, highly popular Ecoboost engines.
  • In Toledo, Chrysler invested $500 million and hired 1,100 new workers to build the next generation, more fuel efficient Jeep models, and GM is investing in building advanced transmissions to squeeze more miles from each gallon.
  • In the Marysville area, Honda is investing in fuel efficient, continuously variable transmissions to help make its new Accord achieve 36 mpg, now a necessity in the highly competitive midsize car market.

Second, higher fuel efficiency is not only directly boosting investments and jobs, but also boosting sales by stimulating pent-up demand for new cars.  According to Automotive News:  “The changeover to high-mpg models, in all segments is the key market driver this year. Dealers say it has been the release valve on pent-up demand as fuel prices soared.” A May 2012 Consumer Reports survey showed that fuel efficiency is what new auto buyers are looking for, and by far their number one concern.

Auto Industry and Workers Clearly Better Off Since 2009

As a result, the U.S. auto industry is clearly back on its feet with sales and jobs on the rise, and fuel economy hitting historic highs.

Fuel Economy and Sales 2009-12.PNG

Based on official data from the Bureau of Labor Statistics, the U.S. auto sector added 231,600 jobs as of September 2012 since the auto industry employment low point in June 2009. Employment in auto manufacturing (motor vehicle assembly plus motor vehicle parts manufacturing) has increased by 152,300, for a 24.4% gain since the trough. (see for latest job statistics).

The jobs impacts of the overall recovery can clearly be seen in a Michigan and Ohio, where job growth since 2009 has been substantially driven by new auto jobs.

MI and OH auto jobs 9.12.PNG

In September, Michigan added 34,100 auto manufacturing jobs for gain of 32.7% since the trough in June 2009.  The state's September 2012 unemployment rate dropped by 4.8 percentage points to 9.3%, nearly three times faster than the national average. 

Ohio’s auto sector also saw robust growth, with 10,500 jobs added for a gain of 16.1% since the trough of June 2009. The unemployment rate in Ohio has also dropped much faster than the national rate, by 3.6 percentage points to below the national average to 7.0%. 

In sum, the elections demonstrated not only the importance of clean energy and the auto bailouts but also, quite simply, that fuel efficiency matters.  With oil prices almost certain to remain high and volatile, and with growing public awareness of the need to tackle climate change, it’s a good bet that attacking clean energy and fuel efficiency standards will continue to be bad politics.

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